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Sat in a title office lobby long enough to watch one house sell twice

I had an appointment at a title office to ask what a closing actually costs on a first deal, because every number I'd been given online was a range wide enough to drive a truck through. They told me to come at ten and the closer was running late.

So I sat in the lobby with a coffee. At about ten fifteen a family came out of the conference room, older couple and a daughter, all a bit teary, carrying a folder. Nice moment, clearly a house they'd had a long time. Twenty minutes later a guy in a polo comes back out of the same room, goes to his truck, comes back in with a second folder. Then at about eleven a younger couple goes in, and the guy in the polo goes in with them.

When I finally got my meeting I asked the closer, kind of joking, if the conference room was on a rotation. She said the file I'd been watching was two closings on one property. The couple sold to the man in the polo. Then the man in the polo sold to the younger couple. Same morning, same room, two separate files, two sets of paperwork.

I asked how he paid for the first one if he was getting paid in the second one and she said usually with short term money that gets repaid out of the second closing, and sometimes the second buyer's funds cover both at once so he brings nothing. Then she wrote out my closing cost estimate and I forgot my own question for a minute.

Still thinking about the fact that the older couple and the younger couple never met and never saw each other's number.

23 replies

Two files means two settlement statements, and each side only ever sees their own. That's the whole point of the structure and it's why people use it instead of selling the contract. If you ever end up on the buyer end of one, read the commitment and ask when the middle party's deed is being recorded relative to yours. Order matters and it's handled differently state to state.

I've read the phrase double close maybe forty times and it never landed until your lobby. Buys it, owns it for an hour, sells it. Fine. I get it now.

The short term money she mentioned is usually called transactional funding. It's priced for a day or two, not a year, so the cost shows up as a flat fee or points rather than anything that looks like a normal interest rate. Whoever lends it wants to see the second contract before they wire.

Did the older couple know? Genuinely asking, not being accusatory. If I sold my parents' house I'd want to know whether the person across the table already had a buyer lined up at a higher price.

The detail I'd chase is what that title office charges to do it. Two closings on one day is double the work for them and somebody's paying for that.

We manage for an owner who buys these on the back end. He's completely relaxed about it. His line is that he pays what the house is worth to him and the middle guy's margin is the middle guy's problem.

@tally your original question was closing costs, and the answer you accidentally got is better than the one you went in for. Two closings means you pay the fixed pieces twice, escrow fee, recording, and in a lot of states transfer tax on both conveyances. That's the reason people who could do this sometimes still don't. Ask your closer for a written estimate on both legs before anyone commits to a date, because the second leg's costs are the ones that surprise people.

I'd want to see the funder's terms before I got excited about it. One day of money can still be a real number when the spread is thin, and it's a fee you're paying whether the second closing happens or not.

The people who actually make this happen are the closers. Two files, one address, everything in order, and nobody in either room knows about the other room. That's a skill.

@plumb same thought. I keep coming back to the service side of these threads. Somebody has to be the person who can run that morning without dropping a wire.

@sextant the transfer tax twice thing is what I didn't understand. So if I were the middle person I'd pay it on buying and then again on selling, in states that charge it?

@juniper the mechanism is that a transfer tax attaches to the conveyance, and there are two conveyances here, so yes in the states that levy one. Which states, at what rate, and who customarily pays it all differ, so get it in writing from the title company for your specific county before you plan around it.

I was on the younger couple's side of a morning like that, except I found the other statement in my folder by accident. The room really does feel completely normal from inside it.